ORG 716 Week 1 Introduction to Organizational Theory Example

Why Organizational Theory Matters: Four Lenses on a Medical Device Maker That Outgrew Its Structure

[Student Name]

University of Phoenix

ORG/716: Organizational Theory and Design

Week 1 Assignment

[Instructor Name]

[Date]

Lakehead Medical Components, its sites, people and figures are composites written for a model paper.

Lakehead Medical Components, a composite company, makes precision-molded and machined parts for medical device brands: catheter components, housings for insulin pumps and parts for surgical staplers. Founded in St. Paul in 1986, it grew slowly to about 600 employees, then bought plants in Tijuana, Mexico, in 2017, Penang, Malaysia, in 2020 and a second Minnesota plant in Plymouth in 2022. It now employs 2,400 people and had revenue of about $480 million last year. Leaders describe two puzzles. Decisions that once took a hallway conversation now take weeks of meetings, and customer complaints and audit findings are lowest at Penang, the newest site, and highest at the original St. Paul plant. This paper introduces organizational theory and uses its main perspectives to frame these puzzles.

What Organizations and Organizational Theory Are

Scott and Davis (2007) define organizations in several ways depending on perspective but share a core: organizations are collectivities oriented to pursuing goals, with relatively formal structures, that also act as social systems and depend on their environments. Organizational theory studies how such collectivities are structured, how they behave, how they change and how they relate to their surroundings. It works at several levels: the social psychological level of individuals and groups inside organizations, the structural level of the organization as a whole and the ecological level of populations of organizations and their environments. Lakehead's puzzles sit mainly at the structural level, though both have roots in groups and in the company's environment.

A Rational System Lens

The rational system perspective, which runs from Taylor and Weber through later administrative theorists, views organizations as instruments designed to reach specific goals through formal structure: defined roles, rules, hierarchy and specialization. Weber's account of bureaucracy described how written rules and clear authority produce predictable, efficient action. From this lens, Lakehead's slow decisions reflect a structure designed for one plant that was never redesigned for four. Approvals that once went to one plant manager now pass through site managers, a vice president of operations, a regulatory affairs function and a new finance team. Formal authority is unclear: site managers and corporate functions both believe they own certain decisions. The rational lens suggests clarifying authority, standardizing decision rules and redesigning the hierarchy.

A Natural System Lens

The natural system perspective, associated with the human relations school, Barnard and Selznick, sees organizations as collectivities whose members share an interest in survival and whose informal structures, norms, relationships and loyalties often matter more than formal design. From this lens, Lakehead's St. Paul plant has a strong informal culture built over 35 years. Long-serving employees know workarounds that are not written down, and the plant's informal leaders resist procedures introduced by corporate quality, which they see as imposed by newcomers. Penang, by contrast, was built recently around documented procedures. The natural lens suggests that St. Paul's quality problems may lie less in its formal systems than in informal norms that treat written procedures as optional.

The oldest plant knows the most about the work and writes down the least.

An Open System Lens

The open system perspective sees organizations as systems that take in resources from their environment, transform them and return outputs, and whose internal arrangements must fit environmental conditions. Lawrence and Lorsch (1967) found that effective firms in uncertain environments developed more differentiated subunits and stronger mechanisms to integrate them, while firms in stable environments needed less of both. Lakehead's sites face different environments: St. Paul serves established U.S. device brands with long-running parts; Penang serves fast-growing Asian and European customers with frequent new product introductions; Tijuana runs high volumes of mature parts. The open system lens suggests that a single structure cannot fit all sites and that what Lakehead needs is appropriate differentiation with stronger integration, not uniform rules.

An Institutional Lens

A newer strand of open system thinking adds institutional pressures. Meyer and Rowan (1977) argued that organizations adopt formal structures partly because those structures are seen as legitimate in their environments, even when they do not improve efficiency, and that formal structure can become decoupled from actual work. Medical device manufacturers operate under FDA quality system regulations and ISO 13485 certification. Lakehead's growing quality documentation may partly reflect pressure to appear compliant to auditors and customers. If documentation is decoupled from daily practice at St. Paul, the institutional lens would predict exactly the pattern observed: procedures exist on paper, while work follows older habits.

Evidence the Lenses Point To

Each lens also directs attention to different evidence. A rational system study would trace decision paths and approval times. A natural system study would observe informal leaders and interview long-serving operators about how work is actually done. An open system study would compare each site's customers, products and regulators. An institutional study would compare written procedures with observed practice. Lakehead already has some of this evidence: an internal review of engineering changes shows that approval now takes a median of 31 days, against 9 before the acquisitions, and audit findings per thousand employees are three times higher at St. Paul than at Penang. Gathering the rest would let leaders test the lenses against one another rather than choose by preference.

What Each Lens Misses

Each perspective sees part of the picture. The rational lens offers clear design remedies but underestimates informal resistance. The natural lens explains resistance but offers less guidance on structure. The open system lens explains why sites differ but can treat the environment as a given rather than something managers shape. The institutional lens explains symbolic compliance but says less about performance. Used together, they suggest that Lakehead's problems involve formal design, informal culture, environmental fit and legitimacy pressures at once.

Questions the Course Will Pursue

Theory turns the leaders' puzzles into researchable questions. How should a growing multisite manufacturer balance standardization and site autonomy? Under what conditions does formal quality documentation change daily practice rather than merely signal compliance? How do acquired sites' cultures interact with the acquirer's? How should leadership differ across sites facing different environments? These questions will be developed in later weeks on classical and modern perspectives, structure, leadership, globalization, people systems and emerging trends, and refined into a research gap in Week 8.

My Interest as a Practitioner Scholar

My own interest lies in the second question. As a quality leader, I have seen procedures written, trained and audited without changing what people did on the floor. Organizational theory gives me language and evidence to study that gap rather than only to complain about it, and doctoral study offers a chance to contribute to how regulated manufacturers close it.

Conclusion

Organizational theory offers lenses rather than answers. Applied to a medical device maker that outgrew its structure, rational, natural, open and institutional perspectives each highlight different causes of slow decisions and uneven quality. Together they show that structure, culture, environment and legitimacy interact and that good questions, drawn from theory, should precede solutions.

References

Lawrence, P. R., & Lorsch, J. W. (1967). Differentiation and integration in complex organizations. Administrative Science Quarterly, 12(1), 1-47. https://doi.org/10.2307/2391211

Meyer, J. W., & Rowan, B. (1977). Institutionalized organizations: Formal structure as myth and ceremony. American Journal of Sociology, 83(2), 340-363. https://doi.org/10.1086/226550

Scott, W. R., & Davis, G. F. (2007). Organizations and organizing: Rational, natural, and open system perspectives. Pearson Prentice Hall.